Shah Fahad
WHEN President of China, Mr.Jinping, announced One Belt One Road Initiative (BRI), western powers prognosticated an emerging superpower and feared that the benefits of this initiative will overshadow their hegemony in the world. Anti-BRI countries warned the member states of BRI that China would debt trap them and compromise their sovereignty. When China Pakistan-Economic Corridor (CPEC) became the crown jewel of the BRI, similar propaganda was initiated to emasculate the project. The US specifically issued official statements advising Islamabad to be cautious of Beijing; regional rivals used non-state actors to sabotage the CPEC, which highlights the strategic importance of this corridor.
The Energy Crisis:
Pakistan has been facing a serious energy crisis for several decades which hampered the overall production of the country. The matter was so serious that the resolution of the energy crisis became the cornerstone of the election campaigns. The energy crisis was primarily the outcome of the short-sightedness of the government during the 1990s’ when Pakistan shifted its reliance from hydropower projects towards fossil fuel plants. The share of hydropower in the overall energy mix of the country was 67% in 1985, which reduced to only 27% by the year 2017. Fossil fuel was not expensive during the mid-1990s; however, oil experienced inflated prices in the market during the early 2000s. Since Pakistan was importing fossil fuel, the electricity generation became an expensive process. The oil prices skyrocketed to almost $147 per barrel in the late 2000s that further increased the cost of generating electricity. Instead of adjusting the sails, the government introduced a cap that no province can put more than 50 megawatts of solar energy to the grid system, which shows the intent of the administration related to clean energy.
Coal projects under CPEC and Criticism:
Pakistan was seeking international funding to overhaul the power sector but the international financiers were not willing to take the risk. When President Xi Jinping announced CPEC, the matter of foremost importance was the improvement of the power sector. The government proposed imported coal-powered projects for electricity generation which was not a good choice and attracted a lot of criticism internationally for their environmental impact. However, the criticism was to malign the CPEC rather than having an environmental concern about these projects. Given Pakistan’s dilapidated infrastructure and the dire need for energy, coal would be a quick solution to the crisis. Moreover, the implementation of new technology would make emissions even lesser.
It is not just Pakistan; many developed countries have been using coal for power generation such as the US and the EU. The USA produces around 24% of its electricity from coal power projects and Germany produces 36%. Similarly, South Korea was producing 44% of its power from coal, South Africa 88%, Indonesia 58% and India 77%.
One criticism of coal power projects is that when the world is moving away from coal, Pakistan is all set to use them for power generation. It is important to note here that even for economically stable countries, the shift from coal to clean energy cannot be sudden, it will be a gradual process. Since coal is cheaper than fossil fuel, it will not only help contract the energy gap in Pakistan but will also be economical for the industrial sector. Once economic stability is achieved and the energy crisis is addressed, Pakistan will gradually phase out coal and shift its reliance on renewable energy.
State Bank of Pakistan estimated that if the Jamshoro power plant was converted from fossil fuel to coal-fired power generation earlier, it would have reduced the import bill of 2014 by $418 million under imported coal and $716 million under domestic coal. Pakistan State Planning Commission estimated in 2011 that the conversion of 12 fuel power plants to coal-powered plants would have a positive economic impact that would be equivalent to four per cent of the country’s GDP. This proves that conversion to coal-powered plants can bring a significant economic benefit to the country’s economy as well.
Renewable Projects under CPEC:
Renewable energy sources such as Hydro, Solar and Wind are part of the projects under CPEC. Some of which have already started producing electricity. Neelum-Jhelum hydropower project was completed in April 2018 and as per the meeting held in December last year, it had generated about 6.2 billion units of clean energy and the estimated amount of this electricity supplied to the national grid were 54 billion rupees. Similarly, the Azad Pattan hydropower project will generate 3.265 billion units of clean energy per year. The renewable projects as part of the CPEC will set an example for the other developing countries as well as other BRI projects. Contrary to the criticism, renewable energy projects still make a large part of the total energy mix. Some other remarkable projects under the aegis of CPEC are: Suki Kinari, Karot Hydropower project, Kohala hydropower project and UEP Wind Farm project.
CPEC’s contribution to the power sector and economy:
Power projects under CPEC have so far contributed 17.72 billion kWh of energy to the national grid which is 15% of the total output. These power projects are the answer to the energy crisis in Pakistan. These projects will not only fulfil future demand, they will make energy affordable as well. The state-of-the-art technology used for coal power projects will ensure minimum emissions. The weightage of fuel in our import bill is very high and with these projects, Pakistan will be able to shrink its import bill and save foreign reserves. It will also significantly reduce its dependency on other nations for its fuel. The industrial sector will benefit from cheaper and sustainable energy, making them more competitive in the world. So far, CPEC has generated 75,000 direct and 200,000 indirect jobs. The amount of taxes paid from CPEC projects are around 250 million dollars. There is no second opinion that these energy projects under CPEC will transform the economy, the energy sector and will be a way forward for clean-green Pakistan.
